(Bloomberg) -- Ethanol consumption credits traded at more than 90 cents apiece when President Donald Trump was elected in November 2016. On Monday, they touched 18 cents, a five-year low, as his administration was expected to unveil changes to U.S. biofuels policy.
The credits, known in the biofuels industry as renewable identification numbers, or RINs, are purchased by oil refiners to prove they have satisfied government quotas for the blending ethanol in gasoline.
The Trump administration is set to announce planned policy changes that include efforts to temper costs for refiners while broadening the market for ethanol, people familiar with the action said June 2. The likely measures -- as flagged last month by Senator Ted Cruz, the Texas Republican who helped broker the deal -- would increase the supply of RINs.
Allowing exports to accrue RINs, as signaled by Cruz, would be "artificially inflating the amount of RINs available for compliance," Bob Dinneen, president of the Renewable Fuels Association, said in a telephone interview.
Refiners argue that compliance costs are too burdensome. Ethanol proponents contend that the program has been working as intended and that the Environmental Protection Agency, which administers the program, is undercutting biofuel quotas by liberally exempting refiners from the mandate.
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